Editor’s note: Veteran entrepreneur and investor Donald Thompson writes a weekly column about management and leadership as well as diversity and other important issues for WRAL TechWire. His columns are published on Wednesdays.

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RESEARCH TRIANGLE PARK – “Proof points” – I keep hearing this phrase, particularly as organizations reassess global challenges and those in their own communities. The C-suite and board-level rationale is straightforward: Show me how allocating resources makes sense when I am carefully crafting budgets for challenges I face right now, as well as those I anticipate over the next 12 to 24 months. 

This past week, I spoke at the Black Men XCEL Summit, an important gathering focused on giving Black men the tools to advance at every leadership level from entry-level management to C-suite executive. Again, I heard that phrase “proof points” used not only as a way to demonstrate the connection between DEI and professional development, but as an exclamation to address the overarching link between culture and economics. 

CAPITALISM ISN’T RACIST

Part of the Summit was a fireside chat with Kirk McDonald, CEO at GroupM, the media arm of global communications conglomerate WPP. As moderator Derek Dingle, executive vice president and chief content officer at Black Enterprise, told the overflowing crowd, McDonald could arguably be the most important Black leader in the advertising industry. WPP’s reach is mind-bending. The company currently places one of every three advertising messages globally across all platforms. 

McDonald emphasized the tight link between DEI and return on investment (ROI), bluntly stating: “Capitalism isn’t racist. If you’re making money, everyone gets over their issue with you.” 

The power of McDonald’s proof point is in the simplicity of the message. This is why The Diversity Movement ties DEI initiatives so closely to business outcomes and talks about “real-world” results, just like the ROI a leader would expect from other business units.

This link between the right thing to do for the world and for the business is the essential proof point that C-suite executives need, but in some respects are still questioning, as if they are having trouble processing the disconnect between their heads and their hearts. They want to believe that DEI initiatives create stellar ROI, but there is still something holding them back from wholesale implementation. 

McDonald’s position at the top of GroupM affords him a unique macro-level perspective. From this vantage, he explained the proof point succinctly: “Good for culture – good for business. Let’s do the right thing, but also make a positive business impact.” 

Guest opinion: Remembering Big Daddy’s lessons – have faith, be brave and focus

WHY DEI MATTERS – THE PROOF POINTS

With the shaky economic and political scene forcing leaders to reevaluate where they allocate resources, I am going back to basics – show the proof points for why workplace excellence matters now more than ever. We have to make it real for the C-suite by pulling in evidence and then using that data to prove the critical link between culture and success. 

Breaking the data into themes, I group them into engagement, innovation and profitability. In each case, the numbers prove that creating workplace excellence delivers significant ROI that is measurable and based on real-world results.

Engagement

The contemporary workplace has changed, not only physically to virtual or hybrid settings, but in how workers engage with their organizations and one another. What is lack of engagement costing employers? According to a Gallup report, some $300 billion in the U.S. alone. 

A healthy culture is a business imperative. The data supports what we’ve learned: DEI improves engagement and agility, which are essential for creating stronger, forward-looking cultures.

Innovation

Building winning organizations is a race for talent against competitors from around the globe. DEI initiatives – rather than being a drain on resources – actually create an environment where employees perform better. An additional benefit in a tight talent market is that prospective employees are attracted to a diverse company that lives its values. 

What we have seen is that utilizing DEI as a tool to change culture leads to greater innovation and better productivity and decision-making within teams. The overall result is higher revenues and profitability through greater efficiency. 

Guest opinion: Don’t use DEI as a scapegoat for bad business decisions  

Profitability 

Building a stronger culture not only leads to greater revenue-generation and success, but it enables organizations to reduce factors that drain resources, such as turnover and lackluster employee morale. From this perspective, culture has a public-facing value, as well as significant value within the company. 

Adding more female leaders alone can account for greater profitability, according to research compiled by the Leadership Research Institute. For example, companies with more women in leadership positions were found to be more profitable versus peer organizations.

One of the most powerful aspects of creating workplace excellence is its direct consequence on any organization’s most important ambassadors – its own people. The simple fact is that happy employees work more efficiently and don’t generally want to leave their positions. A study from Oxford University’s Saïd Business School reveals that happy employees are 13% more productive every week. The outcome for leaders is that these teammates add an extra hour of productivity per work per day or some 200 or more annually. What executive would willingly forego that output per employee? 

When I return to McDonald’s insightful viewpoint: “Good for culture – good for business. Let’s do the right thing, but also make a positive business impact,” I think about the benefits of creating a culture-centric organization based on real-world proof points. We can build better organizations that have stronger engagement, greater innovation and increased profitability while simultaneously transforming the lives of our people, communities and families.

My own final proof point is that culture-centric organizations lead to stronger, more competitive workplaces filled with people who are striving to do their best professionally. The transformation that happens at work will naturally carry over into their personal lives, thus helping build a better world.  

About the Author 

Donald Thompson is CEO and co-founder of The Diversity Movement. His leadership memoir, Underestimated: A CEO’s Unlikely Path to Success, is available now. He has extensive experience as an executive leader and board member, including digital marketing agency WalkWest. Donald is a thought leader on goal achievement, culture change and driving exponential growth. An entrepreneur, keynote speaker, author, Certified Diversity Executive (CDE) and executive coach, he also serves as a board member for organizations in marketing, healthcare, banking, technology and sports. Donald is the host of the “High Octane Leadership” podcast. The Diversity Movement (TDM) enables organizations to build and strengthen culture by tying real-world business outcomes to diversity, equity, and inclusion via a scalable subscription-based employee experience platform. The microlearning platform, “Microvideos by The Diversity Movement,” was recently named one of Fast Company’s “2022 World Changing Ideas.” DEI Navigator is a “chief diversity officer in a box” subscription service that provides small- and mid-sized businesses with the tools, advising and content that leads to action and results. Connect or follow him on Linkedin to learn more.